To implement mandated activities, an NMET Fund has been set up. (Express Photo: Tashi Tobgyal)

To involve the private sector in mines exploration, the Central government has developed various models through which these companies can collaborate with different government entities and get easy funding.

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Under one such model, Indian start-ups can collaborate with Indian or international junior exploration companies (JECs) and put forward an “innovative” proposal for priority funding by National Mineral Exploration Trust (NMET). However, such a proposal should be prepared with the help of a government-notified exploration agency.

Under the second model, an Indian mining company can undertake exploration activity in collaboration with government-notified exploration agency itself as a joint venture. However, according to Ministry of Mines, priority funding can be given to the proposals submitted by such joint venture mining companies only if the proposed greenfield exploration falls nearby the area of its operational mines.

Globally, the exploration is done by JECs, which are standalone exploration companies that specialise in exploration but not in mining. Across the world, exploration is largely funded by private enterprises as they have the technology and the expertise to carry out such a risky and capital-guzzling activity.

NMET is a state-run non-profit body with the primary objective of promoting regional and detailed mineral exploration in the country. The Central government had established NMET under the Mines and Minerals (Development and Regulation) Amendment Act, 2015 and notified its rules on August 14, 2015.

Under the third model, public sector units, which are engaged in exploration activities, would be encouraged to form joint ventures with JECs or start-ups.

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Under the fourth model, the state government and state mineral development corporations can undertake greenfield exploration activity in collaboration with JECs or start-ups. However, it is not clear how projects will get priority funding under third or fourth model.

As per the 2015 mining law, the holder of a mining lease or a composite licence shall pay to the NMET a sum equivalent to two per cent of the annual royalty paid to the respective state government.

NMET has a two-tier structure. The apex body is the Governing Body (GB), chaired by the Minister of Mines. It holds the overall control of the Trust. The Executive Committee (EC), chaired by Secretary, Ministry of Mines, administers and manages its activities. To implement mandated activities, an NMET Fund has been established.

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The Central government is currently revamping the National Mineral Policy (NMP), 2008. During discussions regarding this policy last year, the Niti Aayog told the mines ministry that in order to boost mineral exploration, companies need to be given the “right of first refusal” over the mining area that is being explored.